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Abhinav Singh
Abhinav Singh

BUDGET 2018

Startups expect more reforms around GST, digitisation push

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If one has to go with the wish list of many startups with whom THE WEEK spoke, many want more reforms around GST and also want the government to speed up its digitisation initiatives. Many startups that are in the online digital space feel that the government needs to do much more in terms of bringing digitisation in India and other areas around IT infrastructure.

Aditya Loomba, the joint managing director of Eco Rent a Car, feels that though India attracts high-quality tourists, GST is higher for luxury hotels.

“I feel there should be one common GST slab for all hotels regardless of the category of hotel. The tax percentage should be comparable to other tourism economies like Thailand and Sri Lanka, so that the Indian tourism business gets a level-playing field in regional tourism arena.”

“For ground transportation industry, tourist vehicles (with all-India tourist permit) have to pay heavy interstate taxes to enter another state. These were issues that were expected to go away with the introduction of GST and a single tax regime, but still, tourist transport operators are asked to pay tax even to cross the border. New reforms will be to relax the GST impact on some section of the industry and simplify it for the small traders,” remarked Loomba.

Similarly Mitesh Shah, head of finance at BookMyShow—which is one of the most popular online ticketing platforms in the country—feels that while the GST council has already taken some proactive measures, the government still needs to re-emphasise on a road map for simple and business-friendly GST compliance and administration systems.

“Over the course of next few months, we hope that the government will initiate all necessary constitutional amendments to ensure that there are no other state or local body taxes, as they defeat the very purpose of bringing uniformity in tax structure, while ensuring proper input credit for taxes,” said Shah.

He also feels that for accelerated growth of the startup sector and economy at large, it’s important that the push for digitisation should continue with more vigour.

“Initiatives by the government including waving MDR on debit cards on transactions up to Rs.2,000 really go a long way in attaining the digitisation objective and we hope, on similar lines in post-budget period, rationalisation mechanisms are introduced around credit cards rates as well, which will continue to be a major mode of payments. UPI should be made more cost effective and should be given a much larger push to increase its adoption in India.”

“We also expect the government to take up and address IT infrastructure and allied issues this year, taking into account some serious issues that are being faced by the entertainment or the media sector such as piracy. The IT laws must be strengthened to address the root cause for these issues that are constantly causing a substantial hit to the overall revenues for the sector,” added Shah.

Manu Jolly, CEO of Digiperform, which is a digital marketing training platform, feels that on one hand, the government is promoting 'skilling' and on the other, they have put the same under the 18 per cent GST category.

“I feel there should be no indirect tax on any private institution, which is working on skill development in our country. These skilled resources are going to add to the GDP of the nation in the coming times, hence it needs to be promoted. GST on skilling needs to be abolished or reduced considerably. In fact, traditional education systems are proving ineffective when it comes to providing jobs. It's the new age skills that are helping people getting employed. I am sure the government will look at this in the coming budget,” Jolly told THE WEEK.

Besides this, a representative of GoWork, a startup player in the co-working space, feels that the government should also try to bring in reforms around the co-working space in the country.

Sudeep Singh, co-founder and chief evangelist, at GoWork feels that as the Indian co-working industry has seen phenomenon growth in 2017, it is become a thriving ground for startups and is encouraging their growth within its ecosystem.

“To make this growth upbeat and continuous, we look forward to further developments in government’s Smart Cities initiative, as occupiers are looking for improvement in infrastructure in these cities to be able to make a move towards Tier II and Tier III cities. Also, keeping in mind that startups do not make profit in their primary years, the government can rather lower the income tax slabs for startup employees, which will aid startups in reducing costs. This year, we look ahead to some important tax exemptions that would give an enhancement to all existing and upcoming startups,” said Singh.

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